Why has the government published a White Paper on English Devolution?
A White Paper is an overarching statement of government policy, published to set direction and encourage debate, prior to draft legislation being scrutinised by Parliament.
The English Devolution White Paper, which was published in late December 2024, proposes major reform of the structure, functions and powers within England with the aim of shifting power "away from Whitehall and into the hands of those who know their communities best". It is anticipated that the reforms set out in the White Paper will be implemented through the English Devolution Bill, which is expected to begin its passage through Parliament in the middle of 2025.
Why is reform needed?
The foreword to the English Devolution White Paper has been written by the Deputy Prime Minister, Angela Rayner MP and announces that a "devolution revolution" is needed in order to "change our economy" and "ignite growth in every region".
The case is made that "the Westminster system is part of the problem" which has led to "more regional inequality, slower wage growth and a relative decline in living standards compared to other developed countries".
This seems an over-simplification, given the reasons for wage stagnation, regional inequality and the fall in living standards are wide ranging and complex. However what is clear is that the government has reached a clear decision that bold changes are required, with power moving away from Central Government into the regions, alongside new safeguards around accountability.
What are the main changes proposed in the English Devolution White Paper?
Statutory Devolution Framework & Codification of Powers
Central to the government's plans is the creation of a 'Statutory Devolution Framework', which aims to end the "deal-by-deal" approach to devolution replacing this with a "devolution by default" approach.
Rights, powers and funding will be transferred to 'Strategic Authorities', which will be defined within the English Devolution Bill, at three levels:
- Foundation Strategic Authorities: which will include non-mayoral combined authorities and combined county authorities automatically, as well as any local authority designated as a Strategic Authority but which lacks a Mayor.
- Mayoral Strategic Authorities: the Greater London Authority, all Mayoral Combined Authorities and all Mayoral Combined County Authorities will automatically begin as Mayoral Strategic Authorities.
- Established Mayoral Strategic Authorities are Mayoral Strategic Authorities which have demonstrated that they have effective governance arrangements and can deliver government objectives so are entrusted with enhanced levels of devolution, most notably Established Mayoral Strategic Authorities will be able to receive an Integrated Settlement (multi-year budgets covering areas such as transport, adult skills and local growth).
The codification of powers and governance structures for each tier of devolved authority is intended to create clear governance models and to standardise the scope of powers across local governments.
The government plans for all regions of England to be under the cover of a Strategic Authority and where local agreement is not forthcoming it is anticipated that Ministers will be able to compel local government mergers and / or to establish new Strategic Authorities. This raises legal questions about local consent and the principle of subsidiarity, but the government argues such legislation seems necessary as a backstop to ensure creation of the new model (no doubt this power will be debated and refined when the Bill goes through Parliament).
Increased Mayoral Power
Mayoral Strategic Authorities will be the major beneficiaries of this new devolution package - granted wide ranging powers, including competence over:
- Transport and local infrastructure;
- Skills and employment support;
- Housing and strategic planning;
- Economic development and regeneration;
- Environment and climate change;
- Health, wellbeing and public service reform; and
- Public safety.
Established Mayoral Strategic Authorities will also be able to propose that they take on additional functions under the statutory Devolution Framework. Therefore the competences which are devolved are expected to grow in the coming years.
Increased Funding
In the Autumn Budget 2024, the government announced that multi-billion pound Integrated Settlements will be awarded to Greater Manchester and West Midlands Combined Authorities from the start of the 2025-26 financial year, with the North East, South Yorkshire, West Yorkshire and Liverpool City Region Combined Authorities from the start of the following year. Therefore, subject to compliance safeguards, Mayoral Combined Authorities will benefit from significant funds alongside their new powers.
Mayoral Combined and Combined County Authorities have been able to raise a mayoral precept should they choose since legislation made in 2016 and 2023 respectively. However, they cannot use this on their full range of functions, (including vital growth levers like bus services and adult skills) which has meant this power has rarely been used. The government will legislate to correct this, refining this power.
Foundation Strategic Authorities will benefit from dedicated local growth allocations, decided by formulae with lighter-touch investment sign-off. The 30-year investment funds will remain a core part of the Devolution Framework, with existing arrangements honoured and new areas receiving similar commitments of funding on their creation.
The local growth funding landscape will also be simplified in light of the Spending Review, rationalising the number of funds and moving away from funding competitions.
Local Government Reorganisation
One contentious element set out in the White Paper will be the push towards creating unitary councils by amalgamating the roles of district and county councils.
Although critics have suggested that the creation of "mega-councils" could lead to decision-making that is distant from local communities and potentially undermine democratic representation, the government argues such streamlined power will enhance efficiency, reduce bureaucracy and improve accountability at local government level. The success of North Yorkshire's recent unification is cited as a model.
Any machinery of government change will need to be handled carefully in order to retain the most effective people from each organisation and to ensure that new unitary councils have the appropriate size, capacity and scope to achieve their local policy objectives more efficiently than the previous structure.
Local Empowerment
The White Paper presents the devolution framework as an opportunity to ensure local empowerment by granting councils greater control over activities, establishments and premises in their areas. For example, the government plans to explore how communities can be further strengthened by introducing a community "right to buy" scheme for valued community assets, enabling local communities to take ownership of otherwise empty community spaces.
During the process of reform, it is therefore crucial to consider the views of local communities. Critics have particularly emphasised the importance of ensuring that residents that do not opt for the Mayoral Model are not disadvantaged. Nonetheless, it is suggested that a streamlined approach to governance, which is easier to understand, will likely encourage greater engagement from local businesses and the general public.
Stronger Accountability
It is sensible that the transfer of funds and powers is undertaken alongside the introduction of new safeguards around decision making and managing public money.
All Strategic Authorities will be subject to compliance checks, but also will be required to report on the progress they make towards pre-agreed objectives.
Integrated Settlements will only be made available where the Mayoral Strategic Authority has satisfied criteria related to their governance arrangements and demonstrated a track record of effective financial management, including that:
- In the last 18 months, the relevant Strategic Authority has not been the subject of a Best Value Notice, a MHCLG commissioned independent review or a statutory inspection or intervention;
- The relevant Strategic Authority is not subject to any ongoing or engaged in implementing recommendations from an externally mandated independent review;
- There are no material accounting concerns covering the current or previous financial year which relate to the relevant Strategic Authority's ability to manage public money.
Established Mayoral Strategic Authorities will be held to account during the delivery of their Integrated Settlements via an outcomes framework aligned to national missions and other national priorities, alongside compliance and governance checks.
Therefore Strategic Authorities will be rewarded for demonstrating good governance and delivering upon the pre-agreed goals. The sanction for poor governance or ineffectiveness could be the withdrawal of much needed funds and powers, underlining the importance of recruiting effective Monitoring Officers and other compliance officials.
The Government also intends to fundamentally reform the local audit system, "rebuilding the vital early warning system to recover a key part of our assurance mechanisms, restore local government standards, and ensure transparency".
Conclusions
The publication of the English Devolution White Paper is a statement of intent by the Labour government to change the balance of power within England.
Whilst it probably falls short of a "devolution revolution", what is proposed is a meaningful acceleration of a process that was begun with the Regional Development Agencies in the early 2000s. Devolution by default will ensure every part of England benefits from some level of Strategic Authority. How quickly particular areas see the benefits is likely to depend on the will of the local politicians to embrace the possibilities of devolution. How many powers, funds and functions are devolved into particular areas will depend upon the ability of Strategic Authorities to demonstrate that they have the structures and processes in place to prove they can be trusted to deliver.
The three tier approach to Strategic Authorities is to be welcomed. It is right that organisations which demonstrate their effectiveness should be trusted with greater devolution. However at this time, it is not clear the differences between, for example Foundation Strategic Authorities and Mayoral Strategic Authorities. To have the buy in of the public, it needs to be clear what the rewards of having an effective local Strategic Authority is.
The English Devolution White Paper is titled "Power and Partnership: Foundations for Growth" and sets out a vision under which more decisions are made at a local level.
It is an exciting vision under which three tiers of devolution, delivered through Strategic Authorities, will benefit from increased powers and funds.
However at this time, it is just a statement of intent. In the coming months the White Paper's ideas will be turned into draft legislation, which will then be scrutinised and debated in Parliament. Only when the English Devolution Bill is finalised will we really know whether the Labour government has delivered a "devolution revolution".
DWF Law LLP is one of the UK's leading Public Sector law firms, with expertise in delivering major projects and shaping policy. If you have any questions about the issues raised in this article or have other questions linked to public funding, rights and powers, please do get in touch.
